The Government has introduced draft legislation that will require certain offshore suppliers to register, collect, and return GST at 15% on goods valued at or below $1,000 sold to private consumers in New Zealand. Once enacted, the new rules will apply from 1 October 2019.

The proposed rules:

will apply when the item of goods (below the entry threshold of $1,000) is outside New Zealand at the time of supply and is delivered to a New Zealand address.

will require offshore suppliers to register when their total taxable supplies of goods and services to New Zealand exceed $60,000 in a 12-month period.

will also require electronic marketplaces (including New Zealand resident marketplaces) and re-deliverers to register in certain circumstances.

will remove tariffs and border cost recovery charges from imported consignments valued at or below $1,000.

In our latest Tax Tips Alert, we discuss in more detail the key features of the proposed changes and what they mean for New Zealand consumers, New Zealand GST-registered businesses, and offshore suppliers with sales exceeding the registration threshold. We also provide a roadmap to readiness that summarises the trajectory of the changes and what needs to be considered in order to comply with the new rules.